Cash is still king when travelling abroad2:25

David Koch explains how to avoid getting stung by currency exchange fees when holidaying overseas

February 16th 2015

3 years ago

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World First managing director Ray Ridgeway says international money transfers cost more through banks.Source:News Corp Australia

INTERNATIONAL money transfers are growing in popularity as the world becomes a global village and online commerce booms, but also growing is the potential to get stung by unnecessary fees.

People wanting to transfer money may be hit with three tiers of costs — a sending fee, a poor exchange rate and a receiving fee — but there are cheaper options available.

Consumer group Choice said “exchange rates are where banks really kill you on overseas money transfers” and said the best interest rates and fees were offered by online money transfer businesses including OFX, World First, CurrencyFair and TransferWise.

“The money transfer market has clocked up strong growth in recent years, which can largely be attributed to globalisation and the growing number of people moving to foreign countries for work or study.”

World First managing director Ray Ridgeway said the triple-whammy of costs that some people paid for money transfers was unnecessary.

“Banks say the receiving fee is out of their hands and they allow the receiving bank overseas to charge you $US25 or 25 euros,” he said.

Mr Ridgeway said Australians were losing an average $705 on amounts of $20,000 when using a major bank.

“When the amount you are looking to transfer is higher the banks will take you for an even bigger ride, based on average exchange rates. The cost of your transfer can be over seven times more expensive with a bank as opposed to a currency specialist,” he said.

“Banks have huge overheads. It’s understandable why they charge more but it’s not necessary.”